Alere cancels plans for IPO of UK-based subsidiary

Waltham diagnostics company Alere has postponed an initial public offering of a UK subsidiary, BBI Diagnostics, citing market conditions there.

The cancellation of the IPO, planned before the end of the month, comes on the heels of several other postponed or cancelled IPOs in Europe, despite a resurgence of the IPO market — specifically among biotechs firms — in the U.S.

In a statement today, Alere (NYSE: ALR) said it “has elected not to proceed at this time” with the IPO, previously disclosed in April. The company “intends to seek greater value for the businesses of BBI Diagnostics than could be realized under current equity market conditions in the United Kingdom,” and said it still plans to divest in that and other of its assets deemed to be “non-core.” It plans to use the proceeds for such sales to pay down debt. In the April announcement, the company said it expected to sell a 25 percent ownership in BBI through the IPO, but would maintain a majority ownership.

In 2007, Alere — then named Inverness Medical Innovations — acquired BBI for $150 million. The company makes in vitro diagnostics such as over-the-counter pregnancy tests.

Alere’s decision to sell off certain parts of the company came about in the months leading up to a battle for board seats last July with one of the company’s largest investors, Coppersmith Capital Management. After pressure from Coppersmith and other investors following years of disappointing profits, Alere announced the plan in November 2012 to sell off non-core assets.

In May, the company announced it would separate the roles of CEO and chairman of the board, one of the key changes sought by Coppersmith. The board unanimously elected Gregg Powers as chairman, leaving former chairman, Ron Zwanziger, as president and CEO and a member of the board.

The cancellation of the IPO coming a month after retailer Fat Face dropped its plans for an IPO in the UK, and insurance group Saga price its IPO at the low end of its range, according to the Financial Times. At the same time, however, biotech IPOs in the U.S. have just started to pick back up, with local companies Zafgen and Syndax Therapeutics making plans to be the 10th and 11th such IPO of Massachusetts-based biotech firms this year.

Alere's stock was down 3 percent to $35.31 a share after the announcement today.